Automotive Industry and Porsche Production Line

Topics: Porsche, Automotive industry, Volkswagen Group Pages: 5 (1654 words) Published: November 21, 2012
Shona L. Thomas- Porsche Case Study
1.) General Environment Factors for Porsche:
A.) Demographic segment for Porsche is Age and Income distribution. Porsche target age is group is consumers is male over the age of 40 in addition to an average income of 180k a year. That has a positive effect on this segment because they have defined their niche audience that best responds to their line of cars. B.) Political and Legal segment directly affects the future production of Porsche vehicles with regulatory gas mileage requirements and EPA guidelines. If the 2020 CAFÉ plan is implemented in North America Porsche will not be able to sell cars in North America. Political issues and governmental decisions affect the development of the local economy as for example the increase of oil prices during the Iraq war and the drop of the dollar compared to other currencies, they can also have an influence on sales in the automotive industry. This is a negative effect as the VW sales group has laid a plan to exceed GM and Toyota in sells by 2018 but with pending EPA guidelines this may create a definite challenge. C.) Technological segment for Porsche is leading in product innovation, factory applications and knowledge. Porsche production line has the ability to manufacture two cars seamlessly at the same time without losing any production time or driving cost up. Their technology is a positive and is evident because they offer consulting services to competitive and noncompetitive automobile companies. 2.) Porsche brand is so strong and unique that the only two forces I can thoroughly support are Threat of new entrants and bargaining power of Buyers. A.) Porsche has a threat of new entrants due to automobile manufacturers such as BMW, Nissan and GM. However Porsche has product differentiation and Capital Investments. Porsche is also known for prestige, variety of Porsche emblems and its full line up. Consequently BMW, Nissan and GM have all produced one or two comparable cars. B.) Bargaining power of Buyers is relevant because due to recent economic recessions internationally the price point of Porsches automobiles they followed suit of other competing luxury brands and released more affordable automobiles such as the Cayenne. The production of the Cayenne set record sales for Porsche. Therefore this is a high force. 3.) The two major competitors of Porsche are BWW and Audi.

BMW as designed models such the Z4 and Audi has designed models such as the R8 to compete with Porsche's Cayman and Boxter. Prices points on both models are within the same range as the aforementioned Porsche brands. These two models (BMW and Audi) both have competitive points in regards to engineering, exclusivity and service. The future actions of BMW and Audi that show evidence competitive activity is both automobile companies are creating a more modern design which is attracting more consumers, more drive power options for an economical price and puts luxury and comfort versus Porsche sports then luxury. 4.) The most important Value Chain areas for Porsche are:

A.) Management Information Systems- Joint venture with MHO has led to awards such as Silver Partner service and SAP Channel Partner Gold. The performance and oriented approach allows Porsche to consistently implement new design, technologies and functionalities. Porsche at purchased ownership in MHP and later purchased a controlling share which lead to new business techniques and technologies. The MIS has created sustainable competitive advantage through superior operating performances and the ability to respond with flexibility and quickly to changes in technology. They are superior to each competitor as they do not patent their technological gains but allows others to copy. B.) Supply Chain Management: Porsche SAP technology Leipzig has created a seamless distribution in logistics. Within the same plant, the two models, Panamera and Cayenne can be built simultaneously. Each model requires...
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